Oil companies in India hiked petrol prices by Rs 7.50 per litre on May 23, 2012. They claimed that the largest single shot increase in the retail price of petrol was necessitated by their massive net under-recoveries.
Few were convinced by this argument. Overseas Indian Affairs Minister Vayalar Ravi even sent a letter to his cabinet colleague Jaipal Reddy, questioning the claims of oil marketing companies that they are incurring huge losses.
Ravi not only urged the Oil Minister to scrutinise the issue in detail, he also suggested that "a bold look may be taken at reducing the recent hike."
Public outcry finally forced the government to backtrack. On Jun 2, the oil firms announced a partial rollback. Economic considerations were overlooked as there is no way the companies could have recouped their losses in just ten days.
Notwithstanding this, Congress spokesperson Rashid Alvi said, "We are happy that the price of petrol has been reduced by Rs 2.02 per litre. It will give relief to the common man. Our party has great concern for Aam Admi."
His words were unintentionally ironical given that the common man has been watching the Congress preside over an era of soaring inflation. Prices of essential commodities have gone through the roof, yet Finance Minister Pranab Mukherjee seems to be unconcerned.
The opposition has described the rollback as an "eyewash". AIADMK supremo and Tamil Nadu Chief Minister J Jayalalithaa quipped that the Congress-led government's move reminded her of the Tamil proverb, "feeding popcorns to the hungry elephant." She pointed out that people were burdened by the price rise because of the Centre's "wrong economic policies."
Her Punjab and Odisha counterparts reacted similarly. Naveen Patnaik flayed the partial rollback while Parkash Singh Badal cited the plight of people who were already leading a miserable life due to price spiral. The latter said that the UPA government had blatantly ignored their sentiments by denying them the much-awaited respite.
Noting that the Congress-led government at the Centre had been under tremendous pressure of the oil companies for making reckless hike in petrol prices from time to time, Badal accused the UPA government of once again stabbing the common man in the back.
BJP too strongly criticized the half-hearted step. "The actual quantum of rise in petrol price is still Rs 6. We shall not accept anything less than a complete rollback," its spokesperson Rajiv Pratap Rudy said.
Slamming the ruling dispensation, he warned, "They cannot hoodwink, it is a betrayal, it is trying to cheat the people as if the people, the middle class, do not understand mathematics. Government will have to face severe consequences for this cheating with people of this country."
The BJP spokesperson alleged that despite being a renowned economist, Prime Minister Manmohan Singh failed to control price, inflation or corruption for the last eight years.
Rudy sought to know from the Congress allies in UPA that whether this meagre reduction in petrol price was acceptable to them. Incidentally, Mamata Banerjee who leads the Trinamool Congress government in West Bengal also demanded a full rollback.